2.21. Provision and Contingencies
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of the amount cannot be made.
2.22. Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company, on or before the end of the reporting period but not distributed at the end of the reporting period.
2.23. Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company
• by the weighted average number of equity shares outstanding during the financial year (ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
• the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
• the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
2.24.Segment Reporting
The Company is engaged in manufacture of Bulk Drugs & Intermediates which in the context of Accounting Standard - 17 issued by the Institute of Chartered Accountants of India is considered as a single segment- Ref. Note 31D.
2.25. Critical estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed at each Balance Sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
• Employee benefits (estimation of defined benefit obligation)
Post-employment benefits represent obligations that will be settled in the future and require assumptions to project benefit obligations. Post-employment benefit accounting is intended to reflect the recognition of future benefit costs over the employee's approximate service period, based on the terms of the plans and the investment and funding decisions made. The accounting requires the Company to make assumptions regarding variables such as discount rate and salary growth rate. Changes in these key assumptions can have a significant impact on the defined benefit obligations.
• Impairment of trade receivables
The risk of un-collectability of trade receivables is primarily estimated based on prior experience with, and the past due status of, doubtful debtors, based on factors that include ability to pay, bankruptcy and payment history. The assumptions and estimates applied for determining the provision for impairment are reviewed periodically.
• Estimation of expected useful lives of property, plant and equipment
Management reviews its estimate of the useful lives of property, plant and equipment at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of property, plant and equipment.
Employees Benefits:-
32. Company has not renewed the Group Gratuity Scheme with LIC.
Therefore, Gratuity Valuation has been done through independent agency as per Ind AS 19. As per the Valuation made by the Independent
Agency, the present accrued gratuity comes to ? 1128106/-(previous Year ^ 1144391) on estiamate of discounts @ 7.10% (7.37%) and escalation on salary @ 5% (5%).
Employees Benefits:-
33. Defined Contribution Plan:
Contribution to defined contribution plan, recognized as expenses for the year are as under:
Employer’s Contribution to Provident/Pension Fund - ^2302893/- (Previous Year ^.2194012/-)
The Company contributes applicable rates of salary of all eligible employees towards Provident Fund managed by the Central Government.
Leave Encashment: -
The Company has provided a sum of ? (1525829) (Previous Year ^ 625487) towards Leave encashment based on actuarial valuation.
34. Balance in Advances, Deposits, Unsecured loans, other Liabilities, Trade Receivables, Trade Payables and advances against suppliers are subject to confirmation by respective parties.
35. The Company’s Lease Agreement in respect of Building at Srinagar Colony. The Lease Rentals payable are charged as "Lease Rental Charges" under "Other Expenses’’ in Note No - 26. This leasing arrangement is for longer period and renewable by mutual consent on mutually agreeable terms. Future lease rental payable are as under: (Refer Note No 29)
The Company has not provided amount of ^ 2453160/- (Rupees Twenty four lacs fifty three thousand one hundred sixty only) towards rent of the office premises for the period January,2023 to march, 2024,since the damage caused to the Company’s assets due to heavy seepage of water inside the office premises exceeds the rental amount payable to the Landlord.
The Landlord has filed a civil suit before the Hon'ble City Civil Court of Hyderabad in OS No.363 of 2023.
The matter is sub-judice before the Hon'ble Court and we are confident that the case will be decided in our favour.
36 Investment includes ? 82542475 (Previous Yar ? 82542475) in Shares of Deccan Remedies Limited for the Company’s expansion plans.
37 There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.
38 In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" the management during the year carried out exercise of identifying the assets that may have been impaired in respect of each cash generating unit. On the basis of this review carried out by the management there was no impairment loss on the fixed assets during the year ended 31st March, 2024.
39 Investment Subsidy received from Andhra Pradesh Government is shown under Other Equity.
As Per our report attached For and on behalf of the Board
For R Pugalia & Company
Chartered Accountants
Firm Registration No: 318188E Dinesh Kumar Kej'riwal Arihant Baid
Company Secretary Managing Director
Rajeev Kumar Pugalia Laxmipat Baid Y Ravinder Reddy
Proprietor Chief Financial Officer Director
M.No. 053972
UDIN: 24053972BKCETH6602
Place: Hyderabad
Date : 30th May, 2024
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